SHRI HIMANSHU DILIP JAIN,MUMBAI vs. INCOME TAX OFFICER-19(1)(5), MUMBAI

PDF · subscribers
ITA 4916/MUM/2024Status: DisposedITAT Mumbai25 November 2024AY 2007-083 pages
AI SummaryN/A

What did the Tribunal hold?

Referring to an order from a Co-ordinate Bench where the disallowance rate for identical facts was restricted from 12.5% to 6%, the Tribunal deemed it reasonable to restrict the addition/GP rate to 6% over and above the Gross Profit (GP) rate already disclosed by the assessee.

What were the facts?

The assessee filed appeals against the CIT(A)'s orders for AYs 2007-08 and 2013-14, pertaining to an addition made by the AO for bogus purchases based on GST Department information. While not challenging the merits of sustaining the addition, the assessee disputed the quantum of disallowance, which was sustained at 12.5% of the bogus purchases.

What were the issues?

Whether the quantum of disallowance on account of bogus purchases, sustained at 12.5% by the CIT(A), should be reduced to 6% based on prior tribunal decisions.

Which sections of the Income-tax Act were involved?

Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “SMC”, MUMBAI

Before: SHRI NARENDER KUMAR CHOUDHRY

Per : Narender Kumar Choudhry, Judicial Member:

These appeals have been preferred by the Assessee against the orders even dated 24.07.2024, impugned herein, passed by the Ld.

Commissioner of Income Tax (Appeals) (in short Ld. Commissioner) under section 250 of the Income Tax Act, 1961 (in short ‘the Act’) for the A.Y. 2007-08 & 2013-14.

2.

Both the appeals are based on the almost identical facts except variation in amounts and having involved identical issues and therefore for the sake of brevity the same were heard together and are being disposed of by this composite order by taking into consideration the facts and circumstances and issues involved in as a lead case and result of the same would be mutatis mutandis applicable to both the appeals under consideration.

3.

In the instant case, the Assessee is not pressing his appeals on merits vis-à-vis sustaining the addition on account of bogus purchases on the basis of the information received from GST Department. The Ld. Counsel Shri Mahaveer Jain (Ld. Advocate) has submitted that the Assessee is challenging the quantum of disallowance sustained by the Ld. Commissioner @ 12.5% of the bogus purchases as made by the Assessing Officer (AO) vide assessment order dated 28.03.2016. The Ld. Counsel drew attention of this Bench to order dated 22.05.2024 in and submitted that the Co-ordinate Bench of the Tribunal in the identical facts and circumstances as involved in this case, has also considered the identical addition/disallowance made @ 12.5% of the alleged bogus purchases as GP and restricted the addition/disallowance/GP rate to 6% instead of 12.5%, over and above the GP rate already disclosed by the Assessee. The Ld. D.R. did not refute the claim of the Assessee. Considering the peculiar facts and circumstances of the case and decision of the Co-ordinate bench of the Tribunal in the case referred to above, this Court is inclined to restrict the addition from 12.5% to 6%, over and above to the GP already disclosed, as reasonable, sufficient and justified. Accordingly, the GP rate is restricted to 6% over and above to the GP already disclosed. Resultantly the appeal under consideration i.e. is accordingly party allowed.

4.

In the result, both the appeals filed by the Assessee are partly allowed in the terms determined in ITA No.4916/M/2024.

Order pronounced in the open court on 25.11.2024.

Recent GST High Court judgments

Search GST case law →